What does a Web 2.0 Publishing Company Look like - The 3 Headed Dragon Model

Source: deviantart.net

Lets face it we need to change the business model in how we do things, it is not business as usual. All publishing companies have relied on two principal sources of revenue paid subscriptions and advertising to make it work. Then they were forced to distribute their content of the web for free and it has never been the same since. Journalism is also facing its greatest challenge from the invasion of the ad tech tyrants and the fake news business model. Before we jump on the fake news bandwagon, remember fake news has been around in mainstream news in the sports pages on contract signings, trades and rumours before we punish these tyrants.

Lets have a look at what I call two Web 2.0 publishing companies to see how they survive in the marketplace. What I am seeing is that publishing companies are becoming like a 3 headed dragon now and are now part ad/social agency, part publishing and part ad rep house as their business model.

This is the model of Ideon Media a small company with 30 people, their sources of revenue are 8 consumer magazine publishing sites, with a strong focus in the parent market like Savvy Mom that they own through Maple Media. They also represent 15 USA based sites and sell display advertising for them for the Canadian market. They work with the New Yorker brand and two sister sites that are geared for millennials like Vulture that was recently added to their roster.

The third of head the dragon is the ad/social media agency services for their advertising clients as they can produce social media content campaigns, traditional media and buying and a programmatic media. According to Natalie Milne, they are building a model based on scale with 23 web properties that delivers millions of eyeballs for consumer ad programs. This scale is required to succeed in the digital space in a market where $2CPM prevail.

Here is second company to look at that is trying to ride the video ad wave and is one of the largest global video ad delivery/monetization companies - Teads. This video ad delivery system is a little different as the ad is not placed in the traditional position on the web like the top and right hand side, but is place in the actual article after the first two paragraphs. This is unique in many ways as now ads can be place contextually based on the nature of article. So advertisers looking for the right editorial environment can pick and choose.

All publishers that sign-up for the video ad delivery system can have any unsold inventory sold in a private ad marketplace they manage for demographic buys with other publishers. Teads will sell this private ad network to the ad community and has a local office in Toronto. This a two head dragon model, but it is global in scale with 40 publishers in the USA they are working with that include Time. They have operations in Europe and Asia.

What can we learn from these two companies is that both news and magazine companies needs to add some new tools to the toolbox if they are going to survive and prosper for the next 10 years. The olds ways while they still work need to be refreshed and new ways need to be added.

BUT, basic business strategy rules do not change in this new environment, it just more confusing now as the ad tech tyrants throw out more digital ad concepts as the next miracle cure. This happens even for me sometimes, as we grapple with creating new sources of revenue online and ride the right revenue wave. Doc Searls says it best in this blog posting in our Industry Inspiration column on Masthead when he says.

“The only reason publishers go along with adtech is that they don’t know any other way to make money from advertising online?”

At the end of the day you need to adapt and adjust. I liken this to my experience as a hockey coach, what is a 5-tool player. A five tool player is one that can be skate, pass, shoot, puck handling and puck sense. Other tools are competitiveness and physical play. Today’s publishing companies and employees need to be that 5+ tool player and cannot just specialize in one area any more to compete.

Martin Seto is the principal of Reflex Media, a media consultancy practice offering media owners digital publishing, event management and ad sales help. His media expertise also include working with ad agencies as a media buyer/planner for tv, radio, print, outdoor, magazine and online. He has been in the advertising and media industry for 25+ years and he has been an instructor/speaker with Centennial College and at magazine conferences across Canada. He can be reached at marty(dot)seto(at)
reflexmediasales.com or 416-907-6562, and on LinkedIn.